U.S. Fed to Stay Put on Rates Till '23: Poll

Respondents to a poll of U.S. economic experts now forecast no rate hikes from the Federal Reserve until 2023.

The results are a potential first sign that the Fed’s new strategy of allowing inflation to run above its 2% target for an unspecified time have had an immediate impact on the rate outlook.

The new average forecast, which has the Fed on hold until February 2023, is six months later than the July survey and comes amid more upbeat views on the economic recovery and higher inflation forecasts. Under the previous strategy, where the Fed aimed for a symmetrical 2% target, those conditions might have brought forward the outlook for rate hikes.

The central bank begins a two-day policy meeting Tuesday.

A large majority of the 37 respondents, who include economists, fund managers and strategists, harbor the opinion the Fed will sit tight if inflation moves above its 2% target. In all, 48% said the Fed would tolerate above-target inflation for six months to a year without hiking, and 41% believe the Fed would abide higher inflation for a year or longer.

The respondents were asked specifically how high inflation could average for a six-month period before the Fed hiked. The average response was 3.2%.